Real Estate Brokerage
Edmund is a mortgage officer who closes loans. He is a ______________.
A. Mortgage banker
B. Mortgage broker
C. Mortgage loan originator
D. Underwriter - correct answer ✔✔A. Only the mortgage banker can close and fund loans.
Moses invested in subdivided land and then sold it without improving it. This makes Moses ______.
A. A developer
B. An assessor
C. A reviewer
D. A speculator - correct answer ✔✔D. A speculator will subdivide tracts and sell the lots unimproved. A
developer will improve the lots (water, power, sewer, etc.) before selling them.
Which type of corporation involves double taxation?
A. C corporation
B. Closely held
C. LLC
D. Subchapter S - correct answer ✔✔A. A C corporation is taxed at both the corporate level and the
shareholder level.
Cooperative shareholders under a condop structure have ______.
A. Flexibility in selling and restrictions on subletting, similar to that of condominium owners
B. Flexibility in selling and subletting, similar to that of condominium owners
C. Restrictions in selling and flexibility in subletting, similar to that of condominium owners
D. Restrictions on selling and subletting, similar to those of condominium owners - correct answer ✔✔B.
Condops are a sort of hybrid between a co-op and a condominium. They allow flexibility in selling and
subletting, similar to that enjoyed by condominium owners
,Leases can end in several key ways. Mutual agreement and eviction are two. What is another way that a
lease can terminate?
A. Conversion
B. Criminal use
C. Expiration
D. Neglect - correct answer ✔✔C. A lease can terminate when it expires. Abandonment is another way a
lease can terminate.
Kali invested in a large plot of land and planned to build a beautiful new subdivision. Imagine her dismay
when a very large and vocal group from town picketed her site. What did Kali fail to do before she
invested?
A. Check out regulatory environment
B. Obtain the necessary permits
C. Verify that there was local support for the development
D. Verify that utilities could be run to the new site - correct answer ✔✔C. Before investing in a
development project, investors should make sure they have community support. Community resistance
could lead to issues with obtaining permits.
If you have a REIT that receives most of its revenue from property rental, what type of REIT do you have?
A. Equity
B. Leasehold
C. REMT
D. Tax-deferred - correct answer ✔✔A. Equity REITs invest in a wide range of property types and receive
most of their revenue from rents derived from those properties.
Economic, tax, and market changes are types of _______ risk.
A. Capital
B. Dynamic
C. Environmental
D. Static - correct answer ✔✔B. Dynamic risks are those business risks that cannot be lessened with
insurance. This includes economic, tax, and market changes.
, Bridget has an investment portfolio that includes an equity REIT. Which of these is most likely to be part
of the REIT's investment?
A. Mortgages secured by commercial properties
B. Mortgages secured by residential properties
C. Retail shopping centers
D. Undeveloped land parcels - correct answer ✔✔C. Equity REITs invest in income-producing property,
such as a retail shopping center. Undeveloped land isn't likely to produce income, and equity REITs don't
invest in mortgage debt. That's the role of mortgage REITs.
Which of the following must developers register with the Consumer Financial Protection Bureau?
A. Any subdivisions that have 100 or more nonexempt lots
B. Any subdivisions that have 20 or more nonexempt lots
C. Any subdivisions that have 40 or more nonexempt lots
D. Any subdivisions that have 80 or more nonexempt lots - correct answer ✔✔A. To prevent fraudulent
activity, developers have to register with the Consumer Financial Protection Bureau any subdivisions that
have 100 or more nonexempt lots.
Dawn owns a bungalow three miles from the city center. She rents it to Bob and Jan Siegel. Dawn is a
______.
A. Beneficiary
B. Lessee
C. Lessor
D. Trustee - correct answer ✔✔C. In this scenario, Dawn is the lessor, and Bob and Jan are the lessees.
Which of the following best defines capitalization rate?
A. The expected rate of return on investment
B. The rate at which assets depreciate over time
C. The rate of capital recapture
D. The value of a business as an investment - correct answer ✔✔A. A capitalization rate is the expected
rate of return on an investment and is based on the performance of comparable properties.
Edmund is a mortgage officer who closes loans. He is a ______________.
A. Mortgage banker
B. Mortgage broker
C. Mortgage loan originator
D. Underwriter - correct answer ✔✔A. Only the mortgage banker can close and fund loans.
Moses invested in subdivided land and then sold it without improving it. This makes Moses ______.
A. A developer
B. An assessor
C. A reviewer
D. A speculator - correct answer ✔✔D. A speculator will subdivide tracts and sell the lots unimproved. A
developer will improve the lots (water, power, sewer, etc.) before selling them.
Which type of corporation involves double taxation?
A. C corporation
B. Closely held
C. LLC
D. Subchapter S - correct answer ✔✔A. A C corporation is taxed at both the corporate level and the
shareholder level.
Cooperative shareholders under a condop structure have ______.
A. Flexibility in selling and restrictions on subletting, similar to that of condominium owners
B. Flexibility in selling and subletting, similar to that of condominium owners
C. Restrictions in selling and flexibility in subletting, similar to that of condominium owners
D. Restrictions on selling and subletting, similar to those of condominium owners - correct answer ✔✔B.
Condops are a sort of hybrid between a co-op and a condominium. They allow flexibility in selling and
subletting, similar to that enjoyed by condominium owners
,Leases can end in several key ways. Mutual agreement and eviction are two. What is another way that a
lease can terminate?
A. Conversion
B. Criminal use
C. Expiration
D. Neglect - correct answer ✔✔C. A lease can terminate when it expires. Abandonment is another way a
lease can terminate.
Kali invested in a large plot of land and planned to build a beautiful new subdivision. Imagine her dismay
when a very large and vocal group from town picketed her site. What did Kali fail to do before she
invested?
A. Check out regulatory environment
B. Obtain the necessary permits
C. Verify that there was local support for the development
D. Verify that utilities could be run to the new site - correct answer ✔✔C. Before investing in a
development project, investors should make sure they have community support. Community resistance
could lead to issues with obtaining permits.
If you have a REIT that receives most of its revenue from property rental, what type of REIT do you have?
A. Equity
B. Leasehold
C. REMT
D. Tax-deferred - correct answer ✔✔A. Equity REITs invest in a wide range of property types and receive
most of their revenue from rents derived from those properties.
Economic, tax, and market changes are types of _______ risk.
A. Capital
B. Dynamic
C. Environmental
D. Static - correct answer ✔✔B. Dynamic risks are those business risks that cannot be lessened with
insurance. This includes economic, tax, and market changes.
, Bridget has an investment portfolio that includes an equity REIT. Which of these is most likely to be part
of the REIT's investment?
A. Mortgages secured by commercial properties
B. Mortgages secured by residential properties
C. Retail shopping centers
D. Undeveloped land parcels - correct answer ✔✔C. Equity REITs invest in income-producing property,
such as a retail shopping center. Undeveloped land isn't likely to produce income, and equity REITs don't
invest in mortgage debt. That's the role of mortgage REITs.
Which of the following must developers register with the Consumer Financial Protection Bureau?
A. Any subdivisions that have 100 or more nonexempt lots
B. Any subdivisions that have 20 or more nonexempt lots
C. Any subdivisions that have 40 or more nonexempt lots
D. Any subdivisions that have 80 or more nonexempt lots - correct answer ✔✔A. To prevent fraudulent
activity, developers have to register with the Consumer Financial Protection Bureau any subdivisions that
have 100 or more nonexempt lots.
Dawn owns a bungalow three miles from the city center. She rents it to Bob and Jan Siegel. Dawn is a
______.
A. Beneficiary
B. Lessee
C. Lessor
D. Trustee - correct answer ✔✔C. In this scenario, Dawn is the lessor, and Bob and Jan are the lessees.
Which of the following best defines capitalization rate?
A. The expected rate of return on investment
B. The rate at which assets depreciate over time
C. The rate of capital recapture
D. The value of a business as an investment - correct answer ✔✔A. A capitalization rate is the expected
rate of return on an investment and is based on the performance of comparable properties.
